With so much bad economic news coming out just in the past week, the political and business elite was prepared to comment today that with Census jobs drying up the unemployment rate would rise, but that is not the case today, as the Labor department has just reported a slight dip, from 9.7% in May to 9.5% in June.
There was a net loss of 125,000 jobs, though an increase of 83,000 in the private sector.
The continuing sluggish economy marks a key reason why the Obama administration and the Democrats are in political trouble this year. Not that we couldn't see this happen. On several occasions I've written in this space that, based on my limited knowledge of economics, our economy was going to be in rough conditions until at least 2011 – whether that president was John McCain, Hillary Clinton, or Barack Obama.
Afghanistan is a mess, the oil gusher in the Gulf shows no signs of being stopped yet, and now immigration are huge issues for the administration. But consistently in my lifetime, it's been the U.S. economy that has shaped Americans attitudes about the political party in power in national elections.
Andy Grove, the co-founder and senior adviser at Intel, has an opinion piece in Bloomberg where he takes to task writers like Thomas Friedman and others who extoll the virtues of the power of startup companies in America being the key engine to our economic success. Grove says it's government led initiatives. But he says there is nothing coming out of Washington that will lead us in that direction.
Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best economic system — the freer, the better. Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.
No. 1 Objective
Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.
Meanwhile, a new Gallup poll of independent voters, so critical in elections, shows that they are favoring Republicans by 12% over Democrats in terms of who they're thinking of voting on for Congress later this year.
At this point, dissatisfaction with Obama appears to be a reason independents favor the Republican Party this year. Since March, 42% of independent registered voters, on average, have approved of the job Obama is doing as president, while 51% have disapproved. (This is a slightly more negative assessment than is true for all independents, among whom 44% approve and 45% disapprove of Obama.)
Independent voters who disapprove of Obama's job performance say by 71% to 12% that they would vote for the Republican candidate in their district if the election were held today. In contrast, independent voters who approve of Obama favor the Democratic candidate, but by a smaller 63% to 17% margin.
The vote patterns of independent approvers and disapprovers have been stable from month to month.
This article appears in Jul 1-7, 2010.
